Use Custom Costs

[Red Steele]

THe area university or farm management should have what it costs to hire custom operators to farm an acre of soybeans, corn, etc.

If you use that as a budgeting tool, and try to stay at or under the total, you are getting some good info to work with. If you are consistently under the custom figure, cause you run older equipment , and/or do your own repairs, provide you own labor, this becomes a profit center for you. 

If you are over the custom hire figure, this is a red flag about how you are doing your business. You should hire your farming done in that case.

[OKdon]

Good observation. By the time you figure maintinence on equipment and cost of interest and depreciation on the capital invested it make well cost a land owner less than owning the equipment. Plus the cash can be used to increase your land holdings.

Often time the custom farmer has far better equipment than a small land based farmer can afford.

I think it is most difficult for a modest sized farmer to own and use quality equipment that cost comparably with a good custom operator.

[MMG900]

OK Don,

cant disagree on paper, but how would a 40 something year old Don hold up watching the neighbors in the field next door all week during the best week of planting/harvesting while waiting for the custom guy to show?   

[OKdon]

It helps living 525 miles from the farm. However, my farms are pretty well tiled and sometimes my fields are ready to go before the others. MY operator has two planters a 24 row and an 8 row. Two combines a 12 row corn head and an 8 row so they can gobbleup the acres quickly. Huge grain cart and 4 semis to haul it away.

This year he produced 226 bushels of corn over the scale  and approximately 63 bushels of beans in the bin. Maybe he could do better but that is almost good enough.